Well in a sense you can say they are good on hedges at the 50 cent level. However the 50 cent level only came about because their bad hedges couldn't support a higher distribution.
"We are not far from trading at the value of their hedge book"
Have you got this in a spreadsheet that shows the value of the hedge book based on current pricing? Just curious where you are getting that statement from?
I own quite a few of the ARP 2021 bonds. I got them at a 15-16% YTM which is still pretty good to me.
I'll be buying a good chunk. I'm expecting Q2 to be much better than Q1, and maybe generate a good bounce when the numbers come out.
Everything you say was also true several years ago...and yet here we are with the affo lower, the dividend lower, the book value lower, and of course the share price lower. They keep increasing the size of the company, but expanding the number of shares at a slightly faster pace so that every per share metric continues to get worse.
They have had the potential to reverse this trend for a while now, they just need to actually do it.
Haha, that's true. But iStar did such a terrible job that their bonds fell more than their bad properties did. This made it possible for them to fire-sale properties and then retire debt for even less. That's the only thing that saved them and it only happened because they were so terrible :)
Sounds about right. If arp and linn are both doing offerings, it puts a bit of shock into the entire sector. Tides, boats and all that.
They make loans, that's their thing. So what? Banks make loans too, should they start buying real estate?
Gaining cash only is net zero if you deploy that cash to make as much as the cash costs you. Since they already have cash on hand to invest why raise more and have it just sitting there waiting?
Yes you can. There are 2 types of dividend reinvestment. The first way is through your broker, you get the div deposited in your account, your broker takes it and buys shares on the open market. You can't stop that.
The second type is where instead of giving you cash, the company takes your dividend, and converts it to newly created shares and gives you those instead. Every quarter this happens, there are now more shares that need to be paid.